The Web Services revolution is just beginning. Companies are using software to integrate disparate systems. While this has in some ways been the Holy Grail of enterprise software, the difference this time around is that companies can expose their services through Application Programming Interfaces (APIs) enabling others to use them. This time around, there are also standards for data interchange between companies. Many companies have now started to deploy Web services internally and in the extended enterprise.
- GM plans to cut in half its USD 25 billion investment in inventory and working capital by using Web services to better integrate its operations and move to a build-to-order manufacturing and distribution model. As a start, dealers can now locate specific car models in the inventories of other dealers. (HBR, Oct 2001)
- Southwest Airlines offers customers the ability to make rental car reservations through Dollar by integrating their two systems. The relationship generates USD 2 million in incremental revenue for Dollar, and customers don’t leave the Southwest website. (Release 1.0, Sep 2001)
- Merrill Lynch is integrating information through XML from within the company and from partner organizations to tie-together customer information, product information and real-time market data. This gives the brokers an integrated view needed to meet a customer’s needs. (HBR, Oct 2001)
- Bekins, a US-based moving and storage company, does 80% of its residential moving business during summer. It built a self-hosted Web service that serves 2,000 agents, who bid on seasonal moving capacity. The web service allows agents to bid individually or in groups on these deliveries. The development time: five people for eight weeks. (Line 56)
- Dell publishes a new manufacturing schedule for each of its plants every two hours and feeds it directly into the disparate inventory-management systems maintained by all the vendor-managed hubs, cutting inventory buffers at its plants to just 3-5 hours. Dell is creating an event management service which will send out queries on the status of orders to suppliers, whose own systems will automatically respond. The goal: to reduce hub inventories by 40% and better match demand and supply. (HBR, Oct 2001)
Today, when one buys a book from an online store like Amazon, one is sent an email with the tracking number after the items are shipped. If the shipping companies were to offer a web service to the online store, the online store could send the tracking info directly and thus retain greater control over the customer, who now has a one-stop contact point.
Imagine a web service which can connect inventory systems to accounting, warehousing, ordering, and shipping. This now gives an end-to-end management of the business while dealing with each transaction only once, instead of once for every system it affects. (Line 56)